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The demise of the US
dollar.
Most of you probably do not
realize that the US is on the very brink of bankruptcy. The asset bubble that
first appeared in the equity markets is still there in large part and has been
compounded by unbelievable levels of new debt that has absolutely no chance of
ever being repaid. The current level of personal,corporate and federal debt in
the US is 33 trillion dollars, This does not include unfunded social security
and pension obligations or the 100 trillion dollars of derivative exposure born
by the US. Mortgage debt is currently fuelling consumer spending and GDP
exclusive of federal spending is decreasing. If the US government could not
balance it's budget,let alone pay down its debt,during the largest equity and
credit bubble in recorded human history when will it be able to do
so?Considering the 500 billion dollar current account deficit and 300 billion
dollar budget deficit necessary to keep the economy out of recession the fate of
the dollar is sealed. The war in Iraq may be the straw that finally breaks the
dollars back. The physical economy has been weak for decades and over 40% of GDP
is now generated from financial services while bankruptcies and bad debt are
setting new records on an almost monthly basis. While powell spoke today our
federal reserve bought dollars on the currency exchange to strengthen the dollar
and bolster confidence in the markets. JP Morgan is now the agent of the US
central bank, buying securities futures and commodities whenever the market
softens too much. JPM currently books a derivatives position of 28 trillion
dollars, this is 600 times the equity of the company, and has had a position of
over 20 trillion for several years. No company can stay solvent while employing
this much leverage in such a volatile market! Last edited by Lumberjack on 02-06-2003 at 02:26 AM
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